Residential solar power interest rates headed down

Dividend Solar has received a preliminary rating on a portfolio of $103 million of residential solar power loans from KBRA. The presale report shows a history of decreasing interest rates over the past year across three portfolios offered by Dividend.

Increasing volumes of securitized product, with an increasing number of transactions, will ease investor’s concerns about this product. And when market questions are answerable with data, the price people pay for money – interest rates – go down.

Dividend Solar has received a preliminary rating from the Kroll Bond Rating Agency (KBRA) for a portfolio of $103 million worth of residential solar power loans. The portfolio was rated investment grade, with $24 million being rated AA, $66 million rated A, and two $6 million tranches getting BBB and BB ratings.

Per the report, Dividend Finance – for the first time since its founding inception in Q1 2017 – has had “positive cash operating income” in Q3 2018.

KBRA summarized three portfolios securitized by Dividend over the past twelve months. The above image shows that interest rates have fallen from 6.6% in October of 2017, to 5.73% in this most recent offering. Later in the document, Solar Mosaic portfolios were also looked at over time – but they showed a consistent interest rate.

Most securitizations in the residential solar space covered by pv magazine have been for solar lease companies (for instance SunRun, SunPower, Vivint, Sunnova, Tesla), versus residential loan portfolios like this offered by Dividend. As such, the same data doesn’t exist for all securitization offerings.

The analysis goes through many risks associated with solar loans – relative youth of the industry being one of the largest variables. The report noted that six Dividend Finance customers lost their homes in the California wildfires.

Another risk noted was that many loans include a 16 month no-interest period, followed by a reamortization. This structure is probably in place to allow homeowners to monetize the 30% tax credit the following tax season.

Related content

Elsewhere on pv magazine...

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

Save my name, email, and website in this browser for the next time I comment.

Notify me of follow-up comments by email.

Notify me of new posts by email.

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Keep up to date

pv magazine USA offers daily updates of the latest photovoltaics news. We also offer comprehensive global coverage of the most important solar markets worldwide. Select one or more editions for targeted, up to date information delivered straight to your inbox.

Email*

Select Edition(s)*

Hold Ctrl or Cmd to select multiple editions.

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

Keep up to date

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.